Shifting to electric cars in long run

BMW trainer: Iran can produce low-price cars for exports

EghtesadOnline: Professor Dr. Michael Hoschl is a trainer in the training academy of BMW factory. Iran Daily interviewed him. He gave explanations regarding BMW. He gave recommendations to Iranian auto manufacturers. He also shared valuable information regarding production, marketing and exports. Excerpts follow:

News ID: ۷۷۹۲۷۸

18 September 2017

IRAN DAILY: Please tell us how BMW became a global brand?

MICHAEL HOSCHL: We started our production abroad in the US and later in China which is very successful. We learned that it is profitable to produce BMW where the market is.
Big car plants out of Germany are in the US and China. We are currently building a factory in Mexico.
We have several assembly plants for BMW cars in Malaysia, India, Russia and Brazil, but there is no full plant, there is no painting.

Q: Which factors are considered in R&D sector of BMW plant?
A: Right now, a very little bit of R&D is done in Chinese factories, while 98 percent is done in Germany.

Q: How do you evaluate Iranian car brands?
A: I don’t know too much about Iranian vehicles.

Q: One of the wishes of Iranian carmakers is to export their products. However, they have not been very successful in this respect. What is the reason for this? Do you have any idea?
A: I think the competition is very hard, but we have very successful German brands. We have quite successful American brands. We have successful Asian brands from South Korea and Japan.
The only chance for Iranian car manufacturers is to produce low-price cars. For example, markets such as China, India and Russia are customers of low-price cars.

Q: Are you familiar with any Iranian car brands?
A: Iran Khodro.

Q: What are your suggestions for Iranian automakers? What is your alternative for increasing car sale?
A: Production of low-price cars and selling them in Chinese and Indian markets could happen in the short-term, which means over the next years. However, in the long-term, I think, Iranian carmakers have to do the same as German and Chinese auto makers. They have to develop electric cars because of pollution. We have this development in German cities, but much more in Chinese cities. Sometimes, cars are no longer allowed to drive into the cities because of pollution. Therefore, you need alternative concepts, alternative solutions like electric cars. Electric cars are allowed in cities because they don’t pollute.

Q: Which countries are successful in auto industry?
A: For premium brand, Germany is the most successful country. For an average car, South Korea with Hyundai and Kia brands and Japan with Toyota are successful.

Q: How can Iranian factories promote marketing networks?
A: I think what Iranian car manufacturers should do in the first place is try to be very productive in the process of manufacturing. Because if you try to have a low-cost strategy, then you need very cheap processes without waste and this could be a key to be competitive.

Q: How does Germany promote car sales?
A: We do TV promotion. We do Internet promotion. We have lots of dealership networks with showrooms in Germany. This is one side.
On the other side, we use the possibilities on the Internet. For example, our customers can refer to the Internet. They can choose the model and color. They can see lots of pictures and read the descriptions on the Internet.
They can try the car for the weekends: It is a very good option to convince the customers to purchase the car.

Q: How does BMW factory train its manpower?
A: We have training facilities. We start training the staff a year before production of the car. For team leaders, we train one year before the start of production of the car.
We bring people to Germany for three or four weeks to work with German associates and learn how to manufacture cars. Then, they go back to their countries and they know more.

Q: What do you recommend in the sales sector, production sector and export sector?
A: In the production sector, I recommend a lean production — a systematic method for waste minimization within a manufacturing system without sacrificing productivity.
For exports, I recommend a low-cost car export to countries which need low-cost cars because they cannot afford luxury brands.
In the long run, you have to think about electrified cars — a key component is battery production.
I recommend cooperation with the companies which already have experience in making battery.

Source: Iran Daily